Porsche Just Ditched Diesel

A badge and logo sits on the hood of a Porsche AG vehicle on display as the luxury automaker celebrated its 70th anniversary in Stuttgart, Germany (Alex Kraus/Bloomberg)

Porsche, a luxury auto brand owned by VW, announced today it will no longer produce cars with diesel engines, instead focusing on expanding its offering of electric and hybrid vehicles.

It’s the latest blow to the diesel engine in Germany following the Dieselgate scandal three years ago, in which VW was caught cheating on air pollution emission tests in their diesel vehicles by using so-called ‘defeat devices’. Sales of diesel cars have plummeted since then, and consumers with diesel cars are worried about collapsed resale value.

It has been a rapid fall from grace for a fuel once championed as the climate-friendly alternative to petrol (unleaded gas), because it produces less carbon emissions. The problem, which has become increasingly apparent over the past decade, is that they are worst than petrol when it comes to air pollution. The cheating, it is alleged, was done in order to make diesel cars seem like they were emitting the same air pollution as petrol vehicles.

Porsche was careful in its statement issued today that it does not want to “demonize” diesel engines, and that it would continue to care for the diesel cars already in the market.

“It is, and will remain, an important propulsion technology,” said Porsche CEO Oliver Blume. “We as a sports car manufacturer, however, for whom diesel has always played a secondary role, have come to the conclusion that we would like our future to be diesel-free.”

The share of diesel cars in the Porsche fleet currently stands at 12% worldwide. The company has not had a diesel vehicle in its portfolio since February of this year, but it waited until this month to make the non-manufacture of diesel vehicles official policy.

The company will instead focus the effort and money formerly spent on diesel on electric vehicles, it said. The company will introduce its first fully electric car next year, called the Taycan. By 2022, Porsche plans to have invested more than six billion euros in e-mobility. With the new focus, the company said that by 2025 half of its products could be e-cars.

“Our aim is to occupy the technological vanguard – we are intensifying our focus on the core of our brand while consistently aligning our company with the mobility of the future,” Blume said.

The company said that like other automakers, it has seen demand for diesel models dropping. Meanwhile, interest in hybrid models is increasing. 63% of the Panameras sold in Europe right now are hybrid models.

Although Porsche is a smaller player in the German auto manufacturing sector, other carmakers will be closely watching this move as they wonder whether they too should ditch diesel.